Ratch-Australia’s 227MW Collector Wind Farm in south-eastern New South Wales is set for construction, after reaching financial close this week and funding support from the Clean Energy Finance Corporation, taking its total tally to more than 2GW since its formation under the Gillard government.
The 2GW milestone and funding for Collector was announced on Thursday by the CEFC, which will be the wind farm’s sole debt financier, with an investment of $180 million into the $360 million project.
Collector takes the CEFC’s total confirmed investment commitments in large scale wind energy to almost $1 billion, and more than 2GW of wind capacity.
As part of the investment agreement, Ratch-Australia will install storage capability at its 42.5MW Collinsville solar project in Queensland to improve grid stability in the region – another project the CEFC has provided finance for.
Unusually for major wind projects, Collector will operate as a fully “merchant” project, taking spot prices rather than signing a long term contract. Given the outlook for wholesale prices over the medium to short term, that may be a profitable decision, but getting finance from banks is tough because of the market risks.
“Finance for fully merchant projects unlocks further wind sector opportunities and builds confidence in their longer-term commercial potential,” said the CEFC’s wind sector lead, Andrew Gardner.
“This development has the potential to reduce greenhouse gas emissions by about 9.3 million tonnes over its lifetime, making a significant contribution to efforts to lower carbon emissions across our economy.
“We are pleased to see CEFC finance continuing to fill a significant finance gap for developers, with our capital supporting accelerated project development before off-take contracts are locked in.”
The Collector Wind Farm, which is located along the notoriously windy Cullerin Range south-west of Goulburn, is expected to generate enough energy to power around 80,000 homes once completed. It has been in the planning pipeline for a long time, after overcoming vocal local opposition led by leading accountant Tony Hodgson, a member – at least at the time – of the anti-wind Waubra Foundation.
Danish renewables giant Vestas has been awarded the engineering, procurement and construction contract for the project, which will use 54 of its 4.2MW V117 turbines for the first time in Australia.
Vestas will also use innovative drone and 3D imaging technology to deliver routine blade maintenance and data collection on the project.
The CEFC’s Gardner said the green bank’s investments in large-scale wind had tracked a remarkable level of innovation and change in the sector.
“While our earliest finance supported projects which had secured only partial off-take agreements, we are now working on hybrid projects that bring together wind, solar and storage, as well as projects that are seeking new style off-take agreements with large corporates.
“These developments have driven considerable infrastructure investment in regional areas, while creating long-term assets that capitalise on Australia’s natural wind resources.
“Wind developers are also contributing significant additional investment to local communities through long-term community development funds.”
In the case of Collector, a Ratch-Australia Community Enhancement Fund will invest $240,000 into local projects each year over the 30-year life of the project.
The funds will be invested into the region via a pair of community trusts that have been designed in consultation with the local community.
RATCH-Australia’s executive general manager of business development, Anthony Yeates, paid credit to the important role the CEFC continues to play in Australian renewables, as one the industry’s most active investors.
“Their accumulated experience really helps progress and de-risk the whole industry, and ultimately this benefits everyone,” he said.
Vestas Asia-Pacific President Clive Turton said the success, so far, of the Collector Wind Farm demonstrated the increasing attractiveness of wind energy as a low-cost electricity generator and “an attractive and bankable investment.”
“Vestas is pleased to bring our leading technology, experience and knowledge to provide a customised energy solution for Collector, and to make it the latest in a series of CEFC-funded renewable energy projects that are supporting Australia’s transition to a low-carbon energy system,” Turton said.